Sales for the year to March 31, 2018 at Richemont increased by 3 percent
at actual exchange rates and by 8 percent at constant rates to 10,979
million euros (12,967.7 million dollars), which the company said, were
driven by jewellery. Excluding exceptional watch inventory buy-backs from
multi-brand retail partners, amounting to 203 million euros (239,7 million
dollars) in the year under review and 278 million euros (328 million
dollars) in the prior year, sales at constant exchange rates rose by 7
percent. Gross profit increased by 5 percent to 7, 150 million euros (8,444
million dollars) in value terms.

Review of Richemonts fiscal year performance

Gross margin improved by 120 basis points to 65.1 percent. Operating
profit grew by 5 percent with an operating margin of 16.8 percent.
Excluding one-time net charges of respectively 208 million euros (245.6
million dollars) in the year under review and 109 million euros (128.7
million dollars) in the prior year, operating profit, Richemont said, would
have increased by 10 percent.

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Profit for the year rose by 1 percent to 1, 221 million euros (1,441.8
million dollars), reflecting a higher operating profit and a higher
effective tax rate. Earnings per share (1 A share/10 B shares) increased by
1percent to 2.158 euros (2.548 dollars) on a diluted basis.

The 2017 dividend of 1.80 Swiss franc (1.80 dollar) per A share and 0.18
Swiss franc (0.18 dollar) per B share was paid in September 2017 and
amounted to 1, 016 million Swiss franc (1,015 million dollars) or 918
million euros. The board has proposed a dividend of 1.90 Swiss franc (1.90
dollars) per 1 A share/10 B shares.

Richemont’s results in core operating markets

In the year under review, full year sales in Europe declined by 2
percent, adversely impacted by the relative strength of the euro, inventory
buy-backs in the fourth quarter of the year, tight inventory control at the
external points of sale of the Group’s multi-brand retail partners and the
optimisation of the wholesale distribution network. Sales in France
contracted and were in line with prior year in Switzerland. The United
Kingdom saw positive growth. Sales of all product lines were broadly in
line or positive, compared to prior year, with the exception of watches.
Retail sales growth was subdued, whilst sales in the wholesale channel
declined.

Sales in the Americas grew by 8 percent, driven by strong retail sales,
supported by jewellery and clothing. Retail sales also reflected increased
online sales and the favourable full year impact of the reopening of the
Cartier flagship store in New York in September 2016. Wholesale and watch
sales both declined, impacted by inventory management initiatives.

Japan posted a 6 percent increase in sales, impacted by increased
tourism purchases and softer comparative figures and the full year
contribution from the reopened Cartier and the newly opened Piaget and Van
Cleef & Arpels flagship stores, all in Ginza, Tokyo.

Sales in the Middle East and Africa increased by 2 percent, benefiting
primarily from higher tourist spending but were adversely impacted by
inventory buy-backs and geopolitical uncertainties. Jewellery, watches and
writing instruments posted moderate growth.

Retail sales inprove, wholesale down 1 percent

The contribution of retail sales, through the Maisons’ online stores and
1,123 directly operated boutiques, increased to 63 percent of Group sales,
up from 60 percent in the prior year. The double-digit growth generated in
the retail channel was fuelled by jewellery and watches with six net store
openings including the internalisation of external points of sales. All
regions experienced double digit growth, with the exception of Europe,
which posted subdued growth.

The Group’s wholesale business, including sales to franchise partners,
reported a 1 percent decline. All regions other than Asia Pacific showed
lower sales, impacted by the watch inventory management initiatives. At
actual exchange rates, sales at Cartier and Van Cleef & Arpels were driven
by high single digit growth in jewellery and double digit growth in
watches, on the back of the prior year’s exceptional inventory buy-backs
and the success of the relaunched Panthère collection, both at Cartier. The
company added that performance of the Jewellery Maisons’ directly operated
boutiques and, regionally, Asia Pacific and the Americas were particularly
noteworthy.

Richemont appoints Eric Vallat Head of Fashion & Accessories

Richemont has also announced the appointment of Eric Vallat to the
newly created role of Head of fashion & accessories maisons and will join
the Group’s senior executive committee, effective 1 June 2018. Vallat will
report to Jérôme Lambert, Richemont’s Chief Operating Officer.

A graduate from the HEC business school (France), the company said,
Vallat brings over 20 years of managerial experience across Louis Vuitton
Europe, Christian Dior Couture Japan, Bonpoint and J.M. Weston and, since
2014, Rémy Martin as CEO. In his latest position, Vallat was also a member
of the Rémy Cointreau Group’s executive committee and, since 2016, chairman
of Mount Gay Rum.